Lets talk first about Employee Retention Credit For The Employee :
Our group here what do these guys doing everybody in this room is assisting teach individuals about ERC and uh constantly provide a lovely breakfast and have people actually find out about the program we need to head to the space where we are able to show a few of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of millions of dollars actually Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the way I suggest you understand if you simply start to look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I mean think about how many real clients that went through the program yeah this is the very end this is the celebration at the end when the check is validated the numbers are validated and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you’re able to track it you know when you
get this you understand the check is chosen sure and that’s when they pay so they don’t pay anything up until they really get the cash they don’t pay bottom line Wonder trust anything up until this letter is verified the check is on the way they transfer it into their savings account and they can really rely on Wonder trust that the procedure has been finished and the number of you believe you have actually processed since you began this we’re about 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing which’s what you require you require professionals on the other end of the phone to process this and get it to where you get one of these that’s what matters all right Mr Fantastic here you’re at my YouTube channel we’re discussing something really important today the employee retention credit which most of you have actually never heard of I definitely had not heard of it till very recently and learned a lot about it due to the fact that this is probably the lowest expense of capital for any small business anywhere
anytime if you have workers between five and five hundred so I’ve got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we just phone your bank supervisor and state offer me a loan it does not work there’s not a loan it’s an application and Josh is going to inform all of us about it and how to get it and why I have actually become yes the Ambassador and paid spokesperson for this I enjoy this program it’s going away soon you got to find out all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered companies 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a big distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the cash cash payroll tax refund all right go on sorry I simply need to ensure we got that point I mean that’s a big difference a loan versus money money I like cash money that’s what we’re speaking about okay and the other loans are done so we’re sitting here in 2023 and the eidl is over the PPP is over and the only one left from the original cares Act is the ERC and yes Kevin it is a beautiful difficult check in the mail where you get actual cash from the IRS all right so let’s talk about how it works due to the fact that it sounds like to me if it’s a if it’s staff member retention credit that person had to be a staff member so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for investors it’s for workers right you had to have owned a service but it’s based on you having W-2 workers in America not 10.99. As long as you had W-2 staff members and you paid federal payroll taxes that’s why you would be qualified so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the very first six months of 2021 on the W-2 appropriate so there were six quarters the program was open well walk us through the 6 quarters so you had quarters two three and four of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my preferred part money just how much can you get back per employee that was on a W-2 in those 6 quarters so the estimation in 2020 to be precise Kevin is 50 of the worker’s wage to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s wage to an optimum of 7 thousand per quarter how did that happen um they simply altered the rules in.
2021 versus due to the fact that the turmoil of the pandemic so they wanted to even get more to keep those staff members on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 approximately five thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is since that’s a lot of cash it is now there’s a caution here the PPP money would need to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing on average Kevin is if you took PPP money somewhere around 10 thousand dollars an individual so let’s say hypothetically you owned a restaurant in New York City where I’m from and you had a hundred workers and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s big obviously now the huge question is why does no one know about this because appearance when I first found out about this when I initially fulfilled Josh you understand I have actually got great deals of financial investments in lots of companies I’m a significant supporter for entrepreneurship in America and make many lots of investments in business owners of which many suffered through the pandemic when I first heard about this I called BS I do not believe it because I utilize the PPP we went through the cash center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans which were well deserved and we utilized them wisely to survive during the pandemic so when I became aware of this I said nah it can’t hold true however when I dug around I even called to my politician friends Governor Senators they didn’t learn about it I mean that’s how you understand that’s how misinformation is that there’s no info out there then a bunch of people told me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does nobody understand about the staff member retention credit you understand what’s interesting you’re talking about the banks Kevin because in the PPP loan procedure the federal government made it really clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the big banks in our country and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure procedure that’s all um and here there was turmoil due to the fact that keep in mind in the initial cares act you might refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were refraining from doing ERC since it’s not alone so you’re getting a tax refund so the government never ever made it clear to anyone about how to.
do this does your CFO understand how to do this not really she or he’s never ever done it before do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll company your accountant no your accounting professional’s never done this before unless you have an account that went into this service and bottom line my company Kevin has stayed in business since 2009 and we’ve been working with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 business so a great deal of our big huge corporate clients have dealt with bottom line to recover other federal government programs we’ve done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
employer whose company is totally or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
Schedule.
1. The credit is readily available to all employers despite size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To qualify, the company has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s company is completely or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the comparable quarter in 2019. Once the.
employer’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It works for salaries paid after March 13th and before December 31, 2020.
The meaning of qualifying incomes varies by whether a company had, usually, more or less than.
100 staff members in 2019.
Business that concentrate on ERC filing support normally provide knowledge and support to assist businesses navigate the intricate procedure of declaring the credit. They can provide different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit For The Employee
Eligibility Assessment: These business will evaluate your service’s eligibility for the ERC based on elements such as your market, income, and operations. They can help figure out if you fulfill the requirements for the credit and identify the maximum credit quantity you can claim.
Documentation and Computation: ERC filing services will assist in gathering the necessary documentation, such as payroll records and monetary declarations, to support your claim. They will likewise assist compute the credit amount based on eligible salaries and other qualifying expenses.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these companies can examine your previous payroll records and financials to identify possible chances for retroactive credits. They can assist you amend prior income tax return to declare these refunds.
Filing Support: Business focusing on ERC filings will prepare and send the essential types and paperwork in your place. This consists of completing Type 941 or any other necessary tax return.
Compliance and Updates: ERC policies and assistance have actually progressed gradually. These companies stay updated with the most recent modifications and ensure that your filings comply with the most existing guidelines. They can likewise offer ongoing support if the IRS demands extra information or conducts an audit related to your ERC claim.
It is very important to research and veterinarian any business offering ERC filing assistance to ensure their trustworthiness and competence. Search for recognized companies with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax experts who provide ERC submitting support.
Keep in mind that while these business can offer important support, it’s constantly a great concept to have a standard understanding of the ERC requirements and process yourself. This will assist you make informed choices and guarantee precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to encourage businesses to retain and pay their workers during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified companies, including for-profit companies, tax-exempt organizations, and particular governmental entities. To certify, employers should fulfill one of two requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As mentioned earlier, for 2021, a significant decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity is equal to a percentage (as much as 70%) of qualified wages paid to employees, including certain health insurance expenses. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that received a Paycheck Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows companies to declare the ERC even if they received a PPP loan. Nevertheless, the exact same salaries can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and enhanced, enabling qualified companies to declare the credit for qualified wages paid as far back as March 13, 2020. This retroactive provision supplies a chance for companies to modify prior-year tax returns and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work income tax return, typically Type 941. The excess can be refunded to the employer if the credit goes beyond the quantity of employment taxes owed.
It’s important to note that the ERC provisions and eligibility criteria have evolved gradually. The best strategy is to seek advice from a tax expert or check out the official IRS site for the most comprehensive and updated details regarding the ERC, consisting of any current legal modifications or updates.
To qualify for the ERC, an organization needs to meet among the following requirements:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross receipts. For 2021, a substantial decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is readily available to businesses of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For example, government entities and organizations that got a PPP loan might have limitations on declaring the credit.
The process for claiming the ERC includes finishing the essential types and including the credit on your work income tax return (typically Type 941). The exact time it requires to process the credit can differ based on a number of elements, including the complexity of your business and the work of the internal revenue service. It’s suggested to seek advice from a tax expert for guidance specific to your situation.
There are a number of companies that can help with the procedure of declaring the ERC. Some popular companies that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details supplied here is based on general knowledge and may not reflect the most current updates or changes to the ERC. It’s important to seek advice from a tax professional or go to the official IRS website for the most up-to-date and precise details relating to eligibility, claiming treatments, and available assistance.
Less than 100. If the company had 100 or fewer employees on average in 2019, then the credit is based.
on salaries paid to all workers whether they in fact worked or not. In other words, even if the.
employees worked full time and earned money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
permitted only for salaries paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not just cash payments however also a part of the expense of employer.
supplied healthcare. Employee Retention Credit For The Employee
Payment.
Employers can be right away repaid for the credit by lowering the amount of payroll taxes they.